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The big thing I heard about is this ends QSBS, which stinks for founders: something like 15-20%+ of your company's value. Worse, it's a retroactive tax, meaning
by lmeyerov 5y ago
The big thing I heard about is this ends QSBS, which stinks for founders: something like 15-20%+ of your company's value. Worse, it's a retroactive tax, meaning taxing founders who started the journey with that in mind.
Talk about rich senators punching down vs encouraging company formation!
PSA: If you are starting a US company and haven't heard of QSBS.. look into it at the federal + state levels, as that's a good chunk of your potential net worth.
- CPLX 5y agoAs a founder I'll certainly take advantage of QSBS if it's relevant to me in the future. But let's not delude ourselves -- it's wildly unfair as a tax break. The primary use of it seems to be allowing angel investors to literally pay no taxes whatsoever on millions of dollars in windfall profits.
- lmeyerov 5y agoI'm not sure why it's unfair for first-time founders. STEM founders are largely better off not innovating and instead helping FB sell ads. Tax incentivizes like QSBS for companies, especially bootstrapped co's, help. Job creation & technology invention is why the gov already has direct programs to give tax money directly to startups (SBIR, R&D tax credit, ...), and this is an extension of that encouragement. We need more, not less -- otherwise it'll push even more to the concentration of VC-funded fintech startups and FAANG. I would agree that QSBS support for the already-rich can be less effective -- your case of angels. I'd rather see improvements on the capping structure, vs pushing incentives even more (15-30%!) to working for FAANGs.